Enforcement Won’t Fix It: Australia Needs to Tackle the Root Cause of its Broken Tobacco Policy

But it is the extent of these provisions that has raised eyebrows, with the federal government set to unleash state-based, national campaign against illicit tobacco, backed by enhanced surveillance powers for authorities and tougher penalties, along with the capacity to target proceeds of crime linked to tobacco offenses. The proposed measures would raise suspicious activities related to illegal business to the “serious crime” level, allowing police wiretaps, harsher prison sentences, and asset seizure.

This escalation is a brutal illustration of the desperation the country finds itself in and its attempt to regain control.

For example, more than half of all cigarettes smoked in Australia are now illegal as are the vast majority (as high as 95%) of vaping products. The scale is staggering. The illicit nicotine market is estimated to be worth billions and, according to some analyses, larger than the aggregate cocaine, heroin and MDMA markets combined.

This gap in policy has been seized upon by organised crime. As criminal networks jockey for control of a profitable and growing business, violent turf fights—the arson of cafes, as well as more serious crimes—have erupted. Meanwhile, government revenue has suffered a major blow from unpaid tobacco excise. However, the response policy centers on enforcement rather than the causes of this crisis.

The situation was not always this way, but it did not happen by coincidence. It is the inevitable consequence of two clashing policy choices: super-high tobacco taxes and almost-total restrictions on safer nicotine products. Cigarettes have reached some of the highest prices in the world, with one pack costing more than AUD$40. That theory, in part, should lead to consumption falling to that price level. But in practice, it just shifted consumers to cheaper, untaxed options that illegal networks could supply.

Simultaneously, we have also seen the availability of reduced-risk products—such as vaping devices—heavily restricted, only accessible via cumbersome and expensive medical pathways that are out of step with consumer behaviour. Other options, such as nicotine pouches and heated tobacco products, are all-but banned from legal retail.

This results in a monstrosified market where: harmful products (combustible cigarettes) can still be sold legally, while safer alternatives are inaccessible. This upside-down public health logic created a so-called quasi-prohibition environment, as many experts now label it.

The economics are brutally straightforward for many Australians—especially those at the lower end of the income spectrum. Illicit cigarettes are not hard to get, but legal ones cost money. In contrast, safer alternatives are inaccessible, off-the-shelf aids to quit, such as nicotine gums, can be expensive and frequently fail to satisfy consumer demand.

Sometimes, those thinking of quitting smoking face a greater weekly expense than continued black-market smoking. It is not willpower that Australians are missing, but policy design. Demand must go somewhere when safer alternatives are unaffordable or unobtainable, after all. And as it tends to do, it has decisively moved towards criminal supply chains in Australia.

The latest government crackdown seeks to terminate these networks by interrupting both importation and domestic dissemination. Retailers with illegal products could be shuttered, and those landlords who allow it may also be cited. Potential trends to flag include newer sales channels, such as online, and new categories, such as nicotine pouches.

But of course, history (and recent research) indicates that enforcement alone does not work. A 2026 paper published in Addiction underlines that while policing and border control may have intensified, illicit markets tend to be responsive. Enforcement can at best reduce supply in the short term; at worst, it raises prices and incentivizes crime.

For example, in Australia alone, hundreds of millions have been spent on enforcement without apparently moving the dial on market dynamics.

Australia stands out among successful Western countries for its aversion to harm reduction. New Zealand is an easy country to hold up as a counterexample. Instead, in those instances where intake is closely monitored, large tobacco taxes and the structural policies of regulated access to vaping have been entwined, resulting in smoking rates that fall faster and an illicit market so minor it is lukewarm.

The difference is simple: consumers are provided with realistic, legal options that are as accessible and competitively priced. Regulated vaping markets provide a replacement for smoking and compete head-to-head against black market goods on price and availability

They herd consumers into a controlled framework where product quality and tax obligations are assured. However, Australia has closed this avenue and, in doing so, gifted market share to illegal operators.

The core contradiction in Australian policy is becoming increasingly indefensible by the day. Even high-ranking officials have confessed that the black market has flourished in the wake of high tobacco taxation. But the solution they are pursuing—more police, tougher punishments, and greater surveillance—tackles symptoms, not the roots.

As former enforcement professionals have pointed out, there is a more sensible way: achieving balance by limiting prohibitions to e-liquids sold illegally, while pairing that with regulatory reform. Meanwhile, each illicit transaction is fuelling the lungs of criminal networks, raising violence and eroding public trust in the rule of law. And more importantly, public health outcomes are not improving. The reduction in smoking rates has decelerated, and evidence suggests that any progress may even be reversing among disadvantaged groups most affected by price pressures.

Clearly, the solution is not just more of what is already failing miserably (aggressive enforcement) if the aim is to cut smoking-related harm. It is better regulation, one that weaves together incentives with public health goals. It means making it easier for people to access safer alternatives than cigarettes, not harder. It means realizing that harm reduction is not a compromise but a must. It means creating polices that work with human behavior, not against it.

On the current trajectory, Australia will continue to suffer from an economic, social, and preventable disease perspective in the interim, paying for a system that punishes smokers without offering real alternatives to extrication.

The Cost of Prohibition: Tobacco and Vape Crackdowns Are Fueling Black Markets and Endangering…